Securities Act of 1933 vs Securities Exchange Act of 1934
The 'truth in securities' law governing new issues. Governs secondary-market trading and created the SEC.
What is the difference between Securities Act of 1933 and Securities Exchange Act of 1934?
1933 = new issues, primary market, prospectus. 1934 = trading, secondary market, created the SEC. Remember: issue first, then trade.
| Securities Act of 1933 | Securities Exchange Act of 1934 | |
|---|---|---|
| In one line | The 'truth in securities' law governing new issues. | Governs secondary-market trading and created the SEC. |
| Example | An IPO prospectus filed under the '33 Act. | Ongoing 10-K and 10-Q reporting obligations come from the '34 Act. |
| Unit | Regulation & Professional Duty | Regulation & Professional Duty |
| Series 65 | Section 4: Laws & Ethics | Section 4: Laws & Ethics |
What is Securities Act of 1933?
Regulates the primary market. Requires registration and a prospectus for public offerings so investors receive material information, and imposes liability for material misstatements. Often paired in exams with the 1934 Act, which covers the secondary market.
What is Securities Exchange Act of 1934?
Regulates exchanges, broker-dealers, ongoing issuer reporting, proxy solicitation, insider trading, and margin requirements. It established the SEC as the enforcing agency.